JEFFERSON CITY, Mo. -- Interstate banking has become a hot issue in the Missouri legislature for the first time.

Two bills on the subject have been introduced. One, backed by Citicorp, would allow banking companies from anywhere to buy or open banks in Missouri. The other bill, favored by the state's large holding companies, provides for interstate banking on a reciprocal basis with the eight states bordering Missouri.

The Missouri Bankers Association vigorously opposes what it calls "the Citicorp bill." Robert Yencik, the group's communications director, said, "The process of deregulating the banking industry is sort of a delicate process. It's something that has to be taken in small, fairly delicate steps. This bill would have us jumping way ahead of ourselves."

Mr. Yencik said the association is remaining neutral on the regional bill, introduced by state Rep. Bob Feigenbaum, D-Ferguson, because "our membership can't reach a consensus on it."

State Sen. Thomas W. McCarthy, R-Chesterfield, introduced the unrestricted-entry bill, and he said the banking group's opposition was not surprising. "This really is a stockholders' bill. It is not a bank management bill," he said.

Landmark Bancshares Corp. of St. Louis, which has bout $670 million in assets, is one of the few holding companies to openly support Sen. McCarthy's bill. "We welcome any type of interstate banking. We're willing and able to compete, and we look forward to competing with Citicorp or any other out-of-state institution," said David Koppelmann, senior vice president of Landmark.

Richard J. Lehmann, a Citicorp official in St. Louis, said of the so-called Citicorp bill: "We think the legislation is pro-consumer, pro-business, pro-development, and pro-shareholder. It's difficult to argue that there should be free competition in other businesses and not in the banking business."

Citicorp also is pushing interstate banking bills this year in New Mexico and Michigan.

Asked why Missouri has been targeted, Mr. Lehmann said, "The importance of this state is that Citicorp already has made a substantial commitment to it. We've made more than $300 million in loans here, and we think that we should be able to compete for deposits as well. …

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